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Who Benefits when Cheap Electricity is used?

In a comment on my previous blog post a question was asked as to who benefits when customers are able to use cheap electricity.

The answer is that the electricity company benefits the most! When electricity sources such as wind and solar power which can vary in capacity are used the electricity would be cheaper when there is adequate or excess supply. The electricity would be cheaper then to encourage customers to use power hungry devices at those times rather than when the electricity supply is reduced. The larger the capacity of back-up power plants such as gas-fired plants the larger the overall cost of the system (having extra peak-load capacity that is unused most of the time is a waste of money).

However the company that I once worked for on a project related to this was not an electricity company. I can’t name the company due to the confidentiality agreement but if the project ever goes into production I’ll blog about it.

Recently some of the major investment banks have been focussing on how climate change affects business. I think that with these developments there will be a lot of new investment in environment related technologies. Probably if a few people started work on an embedded Linux box for scheduling power use they could have a good chance of getting some investment. The ideal feature list would include control and monitoring over the Internet, the ability to schedule operations based on power price (received from the grid via a technology similar to X10) and local conditions (how charged the batteries are in your photo-voltaic system). It would control devices via standard X10 modules (which can control the power to the device) as well as directly interfacing with machines that need to be turned on all the time.

I would be happy to offer more suggestions via private email to anyone who is interested in implementing this.

Andrew: There are a variety of plans to tax CO2 emissions to reduce environmental damage. They will result in increases in electricity prices from the polluting power plants.

Currently climate change in Australia has been responsible for reducing the water supplies which then increase the cost of electricity produced from coal fired power plants (the same issue would apply to nuclear power or any other power source which uses steam to turn turbines).

Technology increases are allowing price reductions in renewable energy sources. One example of this is more efficient fans for wind power that can extract more energy for a given volume of air, another is more efficient photo-voltaic cell technology which allows lower production costs while also giving more energy per area.

Currently the price difference between electricity produced from coal and that which is produced from renewable sources is not great. I expect that soon renewable energy sources will be cheaper.